DeFi platforms see profits amid FTX collapse and CEX exodus

November 16, 2022 Coin Telegraph

Adoption

On-chain data flashed positive for DEXs and an increase in protocol revenue, even as markets corrected due to FTX’s insolvency.

A week after the fallout from the FTX and Alameda chaos, some on-chain data points are interesting to observe. Although record amounts of Bitcoin (BTC) and Ether (ETH) are leaving the exchanges, not all decentralized applications (DApps) and protocols have shown growth, mainly due to reliance on FTX and Alameda.

DeFi earnings highlight positive revenue for some protocols

According to Token Terminal’s earnings leaderboard, in the last seven days, three protocols had revenue above $1 million. Ethereum led the on-chain earnings with over $8.5 million total, a sign of strong post-Merge fundamentals.

OpenSea was a distant second place to Ethereum, earning $1.5 million, while nine protocols and DeFi platforms earned more than $100,000.

*Earnings leaderboard. Source: Token Terminal*

Decentralized perpetual exchanges see increased trading volume

Combined with the migration away from centralized exchanges (CEXs), the volatile crypto market has users trading in record numbers.

According to data from Token Terminal, the daily trading volume of perpetual exchanges reached $5 billion, which is the highest daily trading volume since the LUNA and TerraUSD (UST) meltdown in May 2022.

*Perpetual exchange volume. Source: Token Terminal*

While trading volume increased, the total value locked in DeFi lags

Only seven protocols saw a net increase in their total value locked (TVL) over a seven-day period. Gains Network, a perpetual exchange on Polygon, saw the largest seven-day increase at 17.3%

*TVL sorted descending from 7-day. Source: Token Terminal*

One interchain operability protocol, Ren, witnessed a TVL drop of 50% in the last week. As reported by Cointelegraph, Ren partnered closely with Alameda, receiving quarterly funding and keeping its treasury directly on FTX. The protocol itself benefited from Alameda’s locked liquidity in an attempt to improve interoperability.

Data also shows that blockchain revenues are rising amid a constant rate of daily active users. Major blockchains saw an increase of over 300% in daily revenue when compared to previous weeks.

At the same time, daily active users remained steady at 1 million. The dichotomy between these data points suggests that transactions are happening at a more frequent pace among existing users.

*Blockchain revenue and daily active users. Source: Token Terminal*

Blockchain revenues do not necessarily equal earnings

While blockchains saw an increase in revenue,s which is likely primarily due to token emissions, only Ethereum saw positive earnings. Proof-of-stake (PoS) blockchains like Polygon, BNB Smart Chain and Optimism all recorded negative earnings. When PoS blockchains have negative earnings, holders of the tokens are hit with inflationary losses.

*Blockchain earnings. Source: Token Terminal*

On-chain data continues to exhibit strong points with increased activity on decentralized perpetual trading platforms and positive revenue for DeFi protocols. Even though CEX outflows were historic, daily active DeFi users did not increase, but the fact that they remained consistent is notable. The same data also highlighted lagging blockchain earnings (except for Ethereum) and a decrease in TVL.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Solana entities sold 50M tokens to FTX — How long will SOL price suffer?

November 16, 2022 Coin Telegraph

Alameda Research

Most of FTX's Solana exposure stands vested, meaning the defunct exchange will gradually gain access to millions of SOL up until January 2028.

Solana (SOL) has lost 60% of its market value in a week due to its exposure to the now-defunct crypto exchange FTX, which could continue to haunt the "Ethereum killer" well into the future.

FTX/Alameda exposure hurting Solana price

FTX and its sister-firm Alameda Research is liable to have control over 50 million SOL, according to Solana's statement released on Nov. 10.

The FTX entities received 4 million SOL from the Solana Foundation on Aug. 31, 2020. They also started receiving a portion of 12 million SOL from Sep. 11, 2020, and nearly 34.52 million SOL from Jan. 7, 2021, through a "linear monthly unlock" mechanism.

*Summary of SOL sales to FTX/Alameda Research. Source: Solana Labs*

Furthermore, the FTX entities started receiving portions of a 7.5 million SOL reserve from Solana Labs on Feb. 17, 2021. Notably, a transaction worth 62,000 SOL between the same entities stands unsettled.

Most SOL tokens promised to FTX/Alameda are vested, meaning the firm does not yet have them in custody but is liable to receive them through the linear monthly unlock mechanism. The last of these unlocks will occur by January 2028.

That leaves the market with interpretations about what might happen to the SOL tokens once they are unlocked, given FTX's bankruptcy filing that's likely to put a freeze on all remaining funds.

my guess is the bky trustee will try to sell it all OTC to get funds to pay back creditors
— DeFiNanner v2 (@ZekesMommasKid) November 14, 2022

Also, the firm reportedly has $9 billion in liabilities versus a $1 billion balance sheet, which could prompt its trustees to liquidate its SOL holdings to repay debtors.

To avoid such a scenario, Solana could make technical changes to its token economy, reducing FTX's impact. One recent governance proposal submitted on Nov. 13 presented a few options that could be on the table, including:

The errant allocation is burned.
Increase the lock to 10 years on the errant allocation.
Airdrop all SOL token holders' additional SOL, except for the party holding the errant allocation.
A combination of the above.

SOL price relief bounce?

From a technical perspective, Solana shows signs of bullish divergence between its price and relative strength index (RSI).

A bullish divergence materializes when an asset's price forms lower lows but its momentum indicator form a higher low. Traditional analysts see it as a buy signal, which may result in a short-term SOL price recovery on its daily chart.

*SOL/USD daily price chart featuring bullish divergence. Source: TradingView*

SOL/USD could rise toward $18, its range resistance level, in the event of a short-term recovery. In other words, a 20% rebound.

But on longer-timeframe charts, SOL could see further decline toward $2.50, or an 80%-plus drop, in 2023, based on a giant head-and-shoulders setup shown below.

*SOL/USD weekly price chart featuring head-and-shoulder breakdown setup. Source: TradingView*

Interestingly, the token's downside target falls in its most voluminous range, per its Volume Profile Visible Range, or VPVR, indicator.

Chainlink plunges from three-month high as LINK price eyes another 50% correction

November 8, 2022 Coin Telegraph

Altcoin

LINK could drop to nearly $4 by December 2022 given its failure to close above a key resistance level despite strong whale accumulation.

Chainlink (LINK) returned to mimic the broader crypto market downtrend as its price fell alongside top coins Bitcoin (BTC) and Ether (ETH) on Nov. 8.

LINK plunged by as much as 10% into the day to reach $8. While BTC and ETH slipped by approximately 6.5% and 9%. That contrasts with the trend witnessed on Nov. 7, wherein LINK rallied 14% to $9.25, its three-month high, while BTC and ETH dropped 1.5% and 0.5%, respectively.

*LINK/USD two-hour price chart. Source: TradingView*

Overall, on a week-to-date timeframe, Chainlink has outperformed both Bitcoin and Ethereum.

What's making Chainlink stronger

LINK's price has rebounded by nearly 75% after bottoming out at $5.29 in May. Notably, the Chainlink token's recovery rally has coincided with a persistent increase in the supply held by its whales (entities that hold at least 1,000 LINK).

The Chainlink supply percentage held by addresses with a balance between 1,000 LINK and 1 million LINK has risen to nearly 23% in November from 18.2% in May, according to Santiment data. This indicates that rich investors may have been the key players behind the LINK price recovery.

*LINK supply distribution among addresses holding 1K-1M tokens. Source: Santiment*

Interestingly, the LINK accumulation trend is rising in the days leading up to the launch of "Chainlink Staking."

Chainlink Co-founder Sergey Nazarov announced at SmartCon 2022 that their long-awaited LINK staking reward function would go live in December. In addition, the project's official website confirms that it would enable "eligible community members" to stake LINK into its pool in December.

The LINK staking service will be opened for the public in the same month, with the initial annual percentage yield set at 5%. The event has started drawing speculations about increased demand for the Chainlink tokens by the end of 2022.

LINK appears to have benefited in the short-term due to the euphoria around the Chainlink Staking function, given other coins have tumbled in unison in response to the crypto hedge fund Alameda Research's insolvency rumors.

#Chainlink spiked all the way above $9.20 for the first time since August 13th, a ~3 month high despite very volatile markets. This rise has been supported by the largest amount of active $LINK addresses in 5 weeks, and traders are longing aggressively. https://t.co/ZxsZnveURm pic.twitter.com/lia6XAgSar
— Santiment (@santimentfeed) November 8, 2022

A 25% correction setup is still in play

From a technical perspective, LINK's recovery rally since May has been confined inside an ascending triangle range.

Ascending Triangles are continuation patterns, meaning they typically send the price in the direction of its previous trend after a consolidation period. LINK was trending downward before it formed its ascending triangle.

The token's likelihood of continuing its downtrend and reaching its profit target stands at 44%, per the observation of ascending triangles by veteran investor Thomas Bulkowski. The profit target is measured after adding the maximum triangle height to its breakdown point, as illustrated below.

*LINK/USD three-day price chart featuring ascending triangle breakdown setup. Source: TradingView*

That puts LINK en route to around $4.15 by December 2022, down about 50% from today's price.

Conversely, independent market analyst Pentoshi anticipates LINK to reach $12 in the same period, given the token has been floating above the same support that was instrumental in sending its price to a record high in May 2021.

*LINK/USDT three-day price chart. Source: TradingView/Pentoshi*

"While people are quiet on it now. I don't think that will be the case 3-4 weeks from now," Pentoshi said.

Altcoin That’s Up 50% in a Week Is Now One To Watch Ahead of Next Bull Cycle, Says Coin Bureau Host

November 7, 2022 The Daily Hodl

Solana erases its ‘Google rally’ gains but a 50% SOL price recovery is still in play

November 7, 2022 Coin Telegraph

Alameda Research

Solana bulls show signs of countering the ongoing correction trend, raising anticipations that SOL price would recover in the coming months.

A recent price rally in the Solana (SOL) market ran out of steam midway as traders’ attention shifted to crypto-focused hedge fund Alameda Research’s insolvency rumors.

Alameda Research insolvency rumors affect SOL

On Nov. 7, SOL’s price plunged nearly 6% to about $30.50. The intraday selloff came as a part of a broader pullback trend that started on Nov. 5 when SOL peaked at around $38.75. Between then and now, the Solana token is down over 20%.

*SOL/USD daily price chart. Source: TradingView*

The beginning of SOL’s plunge coincided with reports that Alameda Research has liabilities worth $8 billion but may not have liquid assets on its balance sheet to meet those obligations.

Interestingly, the value of all those assets plunged synchronously in the past 48 hours — including SOL, as well as FTX Token (FTT), Serum (SRM) and Oxygen (OXY) — on fears of cascading liquidation if Alameda Research becomes insolvent.

1. low liquidity tokens

$4.6bn of the assets are in low liquidity tokens:

⚰️ $SOL
⚰️ $SRM
⚰️ $MAPS
⚰️ $OXY
⚰️ $FIDA

other than SOL there is no way to liquidate the rest of the holdings without completely crashing the markets

the last 4 on the list are highly dillutive too!
— otteroooo (@otteroooo) November 7, 2022

Google partnership, NFT growth

Nevertheless, traders showed interest in holding SOL’s price above $30, a technical support level, on Nov. 7. One reason could be a flurry of optimistic news that emerged over the weekend, including the launch of smartphones, DApp stores, and a Google Cloud partnership.

In addition, Solana continues gaining higher traction in the nonfungible token (NFT) sector. For instance, the total number of NFTs released on the Solana blockchain is up 19.3% quarter-over-quarter to reach over 8 million in Q3 2022.

“Several developments across Solana’s NFT sector allowed it to maintain a strong position relative to a peer group of the top L1s by secondary NFT sales volume,” noted James Trautman, researcher at data resource Messari, adding:

“Secondary sales volume managed to eclipse Ethereum in early September. The majority of the activity during that period took place on Magic Eden V2.”

*Solana NFT secondary sales volume dominance. Source: Messari/CryptoSlam*

On Nov. 2, Instagram added support for Solana-based NFTs, enabling users to create, sell and market their favorite digital arts and collectibles.

50% SOL price rebound?

As mentioned above, the SOL price’s correction showed signs of exhaustion when it retested $30 as its support level on Nov. 7.

Since August 2022, two rebound moves from this support line saw SOL recovering to nearly $37, excluding one time when the price slipped toward $27.75 in October. The same price ceiling, coupled with a multi-month descending trendline resistance, was instrumental in capping the Solana token’s price rally in the week ending Nov. 6.

A break above the $37 resistance line could have SOL test the $44.25-47 range thereafter, or a 50% price rally when measured from current price levels, by December 2022

Conversely, an extended selloff below the $27.75-$30 support area risks sending SOL’s price to around $19.50, or about 40% lower than today’s price.

*SOL/USD weekly price chart. Source: TradingView*

The $19.50 level served as support between March and July 2021, as shown in the chart above.

Litecoin pre-halving fractal hints at 200% LTC price rally by July 2023

November 3, 2022 Coin Telegraph

$Litecoin pre-halving fractal hints at 200% LTC price rally by July 2023$

Altcoin

Litecoin's momentum indicators signal extremely oversold conditions, hinting at the formation of a potential market bottom.

The price of Litecoin (LTC) could skyrocket by up to 200% by July 2023, coinciding with its halving event, reducing miner block rewards by 50%.

Litecoin has bottomed out?

Litecoin has undergone two halvings since its launch in October 2011. The first one occurred in August 2015, which reduced its block reward from 50 LTC to 25 LTC. The second happened in August 2019, which slashed the 25 LTC reward to 12.5 LTC.

Interestingly, each Litecoin halving event occurred after a volatile LTC price cycle, namely an enormous price pump, followed by a similarly massive correction, a price bottom, and recovery to a local top.

After the Litecoin halvings, LTCs' price corrected from its local top, established another bottom, and followed it with another massive price rally to a new record high, as shown below,

*LTC/USD weekly price chart featuring halving fractals. Source: TheScalpingPro*

Litecoin's third halving is scheduled to occur sometime in July 2023. Meanwhile, market analysts are already pointing out that LTC's price is undergoing the same pre-halving trajectory as before the 2011 and 2019 events, now in the bottoming-out stage.

The Scalping Pro, an independent market analyst, added a dose of MACD and RSI momentum indicators to support the bullish outlook. Momentum indicators determine an asset's oversold and overbought conditions to predict potential trend reversals.

On a weekly timeframe, LTC's RSI and MACD have turned extremely oversold, which coincided with market bottoms ahead of the previous halving events. Thus, the analyst considers it a strong cue for another major LTC price rally.

#LTC x RSI + MACD (1W) 2/5

Everytime WEEKLY RSI entered the oversold zone with MACD crossover below the zero line

It has marked #Litecoin bottom historically.

Past preformance -
2015 ~ +36246%
2019 ~ +1333%
2022 ~ ??? pic.twitter.com/fRbY4VAkuf
— Mags.eth (@thescalpingpro) November 2, 2022

Will LTC price reach $180 by July 2023?

Litecoin may see a new local top if it has indeed bottomed out near $40 in June 2022.

Drawing Fibonacci retracement graphs between Litecoin's pre-halving correction peaks and bottoms highlights the likelihood of testing the 0.236 and 0.382 Fib lines as their upside targets.

*LTC/USD weekly price chart featuring Fib line targets. Source: TradingView*

For instance, in 2011, Litecoin established its local top at the 0.236 Fib line near $10 in July, six months after bottoming out near $1.31.

*LTC/USD weekly price chart featuring pre-1st-halving trend. Source: TradingView*

In 2019, LTC price formed its local top at the 0.382 Fib line near $340 in June after bouncing from around $21 in December 2018.

*LTC/USD weekly price chart featuring pre-2nd-halving trend. Source: TradingView*

In the current scenario, Litecoin's 0.236 and 0.382 Fib lines coincide with approximately $130 and $180, respectively.

*LTC/USD weekly price chart featuring pre-3rd-halving trend. Source: TradingView*

These levels could become potential local tops if Litecoin confirms $40 as its bottom. In other words, a 100%-200% price rally by July 2023 when measured from the current price levels.

Shiba Inu price drops to record low vs Dogecoin — Will history repeat with a 150% rally?

November 3, 2022 Coin Telegraph

Altcoin

SHIB price is still in the danger zone against the U.S. dollar, despite not being as "overbought" as DOGE.

Shiba Inu (SHIB) price can rise by nearly 150% versus its top meme-coin rival, Dogecoin (DOGE), in the coming months, based on a technical fractal.

SHIB hits record low against DOGE

The bullish setup appears as the SHIB/DOGE pair rebounded slightly after dropping to 0.0000841 — its lowest level ever — on Nov. 1. The price level coincided with a descending trendline that has served as strong support for the pair since November 2021.

For instance, Shiba Inu’s previous drop to the said trendline occurred in May 2022, which preceded a 100% recovery rally in the next three months. Similarly, in January 2022, the SHIB/DOGE pair rebounded by more than 50% in less than a month.

Interestingly, all the SHIB/DOGE’s rebound moves reached the 0.0002186-0.0002536 range as their primary upside targets. This area coincides with the pair’s 0.786-1 Fib line range, derived from the Fibonacci retracement graph drawn from the 0.0002536 swing high to the 0.0000899 swing low, as shown in the chart below.

*SHIB/DOGE daily price chart. Source: TradingView*

Therefore, SHIB could once again see a sharp bullish reversal versus DOGE if history repeats, with the upside target in the 0.0002186-0.0002536 range. In other words, at least a 150% price rally by Q1 2023.

In addition, the pair’s daily relative strength index (RSI) signals extreme oversold conditions after dropping to its lowest levels in history, suggesting that a rebound is likely in the near future.

SHIB price risks more losses in USD pair

More cues about an imminent SHIB/DOGE pair rally come from these meme-coins’ individual performances versus the U.S. dollar.

Notably, Dogecoin price rallied by more than 100% versus the dollar in October as traders assessed the its potential to become an integral part of Twitter after Elon Musk’s takeover of the social media giant.

*DOGE/USD three-day price chart. Source: TradingView*

This pushed DOGE’s daily RSI over 95 in late October, the most overbought since April 2021. The coin remains technically overbought as of Nov. 3, hinting at a potential price correction in the coming days.

In other words, Dogecoin could drop toward $0.055, or 60% from current price levels, by the end of 2022, as previously reported.

On the other hand, Shiba Inu closed October with a 10.5% profit, and as of Nov. 3, its RSI is in the neutral 30-70 zone, suggesting lower sell-side pressure compared to DOGE.

Nevertheless, the SHIB/USDT pair still risks a 10%-15% short-term price correction to $0.00001088 based on its recent fluctuations inside an ascending triangle range, as shown below.

*SHIB/USDT three-day price chart. Source: TradingView*

Meanwhile, a break below $0.00001088 risks triggering an ascending triangle breakdown. Such breakdowns during a downtrend typically send the price lower by as much as the pattern's maximum height.

$SHIB pic.twitter.com/BL1tIdlTCm
— il Capo Of Crypto (@CryptoCapo_) November 1, 2022

Therefore, Shiba Inu's price is in danger of crashing to $0.00000682 should a decisive breakdown occur, a 45% correction by Q1.

Dogecoin price rallies 150% in 4 days, but DOGE now most ‘overbought’ since April 2021

October 29, 2022 Coin Telegraph

Altcoin

DOGE price could drop 60% by the end of this year as it reaches its most overbought level since April 2021.

The Dogecoin (DOGE) price rally extended further on Oct. 29 in hopes that the cryptocurrency would get a major boost from Elon Musk's Twitter acquisition.

Elon Musk boosts Dogecoin price again

Dogecoin price jumped by nearly 75% to reach $0.146 on Oct. 29, the biggest daily gain since April 2021.

*DOGE/USD daily price chart. Source: TradingView*

Notably, the meme-coin's massive intraday rally came as a part of a broader uptrend that started earlier this week on Oct. 25. In total, DOGE's price gained 150% during the Oct. 25-29 price rally.

The surge was also accompanied by a decent increase in its daily trading volumes. That coincided with a spike in the number of DOGE transactions exceeding $100,000, according to Santiment. Both indicators sugges a growing demand for Dogecoin tokens among rich investors, or so-called "whales."

*Dogecoin whale transaction count. Source: Santiment*

The jump across Dogecoin's key metrics reflect investors' excitement about Elon Musk's Twitter acquisition on Oct. 27. Earlier this year, the billionaire entrepreneur had flirted with the idea of making Dogecoin a payment method to purchase the Twitter Blue subscription.

Musk's Tesla and SpaceX already accept DOGE payments for their merchandise.

$DOGE, the official currency of Twitter.
— David Gokhshtein (@davidgokhshtein) October 28, 2022

Shiba Inu, meme-coins follow DOGE

Shiba Inu (SHIB), the second-largest meme token by market capitalization, posted a copy-cat rally as well.

On Oct. 29 alone, SHIB's price jumped by 30% to $0.00001519, its highest level since August 2022. Like Dogecoin, Shiba Inu's rally came as a part of a broader uptrend that started on Oct. 25. Since then, its price has gained 53%.

*SHIB/USD daily price chart. Source: TradingView*

Additionally, other meme coins have jumped massively in the said period, including Dogelon Mars (ELON), which rallied 140%.

*Meme coins performance on hourly, daily, and weekly timeframes. Source: CoinMarketCap*

Dogecoin most overbought since April 2021

Dogecoin's ongoing price rally is starting to look overstretched, however, according to a classic technical indicator.

The relative strength index (RSI), a momentum indicator determining the degree of recent price changes to analyze overbought or oversold levels, has risen to 93.69 on the daily Dogecoin chart. This is the highest level since April 2021, a month before the DOGE price rallied to its record high of $0.75.

Therefore, the "overbought" conditions do not necessarily mean an immediate bearish reversal. But they do reflect the current euphoric buying momentum in the market, which sooner or later prompts the price to trend either sideways or correct downward.

Dogecoin's 2018-2020 bear market on a weekly chart sheds light on similar price action. Notably, DOGE crashed by almost 95% almost two years after peaking at $0.0194 in January 2018.

The token's correction period saw it trending inside a descending channel. It broke out of the range to the upside in July 2020 but followed the upside move with a sideways consolidation trend — between its 0 Fib line of 0.0022 and 0.236 Fib line of $0.0054 — until December 2020.

*DOGE/USD weekly price chart. Source: TradingView*

In comparison, Dogecoin's ongoing bear market is shorter but shows a similar trend trajectory to the 2018-2020 period, as shown above. Therefore, DOGE may fluctuate inside its current 0-0.236 Fib line range (or the $0.055-$0.176 range) following its descending channel breakout.

In other words, DOGE could correct toward $0.055 by the end of this year, down about 60% from current price levels, if the fractal plays out as intended.

Conversely, an immediate breakout above the 0.236 Fib line could have DOGE eye $0.25 as its next upside target.

Dogecoin price jumps 40% on Elon Musk, Twitter’s crypto wallet rumors

October 27, 2022 Coin Telegraph

Altcoin

DOGE could undergo a 20% price correction before the end of the year despite strong fundamentals.

Dogecoin’s (DOGE) price rallied to its best levels in two months as traders assessed Twitter’s potential to create a cryptocurrency wallet product.

Elon Musk fuels Dogecoin rally again

DOGE’s price jumped to $0.081 on Oct. 27. The price gained roughly 40% two days after Jane Manchun Wong, a popular tech blogger, claimed that Twitter is working on a wallet prototype that supports cryptocurrency deposits and withdrawals.

Elon Musk is the thread that connects Dogecoin and Twitter. Earlier this year, the Tesla and SpaceX CEO won the bid to purchase Twitter for $44 billion. Later, on April 11, he flirted with the idea of adding Dogecoin as a payment method for the Twitter Blue subscription service.

DOGE’s price grew 30% to $0.17 in 10 days after Musk’s pro-crypto suggestion to the Twitter board. But the memetoken fell drastically afterward, reaching as low as $0.05 in June as Musk attempted to back away from the deal, citing his concerns over Twitter’s user figures.

Twitter sued Musk in response, eventually prompting the court to rule in its favor. Chancellor Kathaleen McCormick, the judge overseeing the legal battle, denied attempts by Musk to postpone the trial, noting that the deal should close by 5 pm ET on Oct. 28.

Musk changed his Twitter bio to “Chief of Twit” on Oct. 26, followed by a personal visit to the Twitter headquarters on the same day. That raised anticipations that Musk would close the deal per the court deadline, paving the way for Dogecoin to become an integral part of the Twitter platform.

#Dogecoin pumped 15% after this: pic.twitter.com/MCZ9iGyt1a
— Altcoin Daily (@AltcoinDailyio) October 27, 2022

DOGE price risks 20% correction

From a technical standpoint, Dogecoin’s recovery shows signs of exhaustion as its price tests a strong resistance confluence.

On the three-day chart, the confluence comprises three resistance levels: a multi-month descending trendline, the 50-3D exponential moving average (the red wave), and a horizontal level around $0.08, as shown below.

Given DOGE’s immediate correction after testing these resistance levels, the token’s possibility of heading lower appears high. Meanwhile, its downside target is near the ascending trendline that has served as support in recent months.

That puts DOGE’s price en route to around $0.06 in Q4/2022, approximately 20% below the current price.

Conversely, a decisive breakout above the resistance confluence could have DOGE eye the 200-3D EMA (the blue wave) near $0.11 as its next upside target. In other words, a 50% boom from current price levels.

Are crypto trading bots legit?

October 26, 2022 Coin Telegraph

Altcoin

A tool for professional traders, crypto trading bots are increasingly popular among retail investors for the automation they offer.

How much does a crypto trading bot cost, and are they worth it?

While most popular crypto trading bots are offered for free, they do come with associated costs, such as trading commissions and withdrawal fees, that need to be evaluated before proceeding.

When choosing a crypto trading bot, investors need to weigh the pros and cons of “free” crypto trading bots compared to those that charge a flat monthly or annual subscription fee. Most popular crypto trading bots like Naga, Pionex, eToroX do not charge users for viewing but have trading commissions starting from as low as 0.05% for every trade executed via their platform.

This is especially pertinent for those whose daily trading volumes regularly exceed tens of thousands of dollars. The trading fees due over a month could be far more than the subscription fee charged by other competitors.

For example, cloud-based trading bots like CoinRule and CryptoHopper provide a free trial, after which users can be charged from as low as $19/month to as high as $450/month, depending on the plan and range of services selected. These trading bots make more sense for investors with high trading volumes and who want to enjoy these services from anywhere in the world.

That said, investors or traders looking to purchase or rent a crypto trading bot need to verify if their crypto exchange supports bots. For example, CoinBase does not allow trading bots to interact with its platform, providing that utility with its CoinBase Pro platform.

However, with Coinbase announcing that the CoinBase Pro platform will cease to exist by the end of 2022, all advanced trading features, including the use of trading bots, will be available to all its users by the start of 2023. Exchanges like Binance, on the other hand, support a range of crypto trading bots and are much more suited for those looking to indulge in the high-speed trading powered by these bots.

Are crypto trading bots legal and safe?

While crypto trading bots are legal and widely used by institutional investors, many fake or poorly coded bots are being sold to unassuming investors by anonymous bot creators.

Despite many reservations regarding the legal status of crypto trading bots, the fact remains that these bots are used worldwide and are considered to be legal. The extent of automated trading in traditional financial markets has been growing, and there is no reason to believe that cryptocurrency markets will fare any differently.

However, being legal is not the same as being safe. This is especially true for traders accustomed to trading in large volumes in the hope of eking out sizable profits from marginal price changes in the underlying cryptocurrency.

While a crypto trading bot will undoubtedly help execute large trades in a matter of a few milliseconds, the potential for raking up huge losses is very high if the trading strategy is not sufficiently back-tested. A critical component of developing a successful trading system, backtesting involves recreating outcomes using historical data and the resulting statistics to gauge the success of the trading strategy.

Additionally, cryptocurrency markets do not function based on technical analysis alone, requiring traders to be mindful of fundamental changes or updates to the underlying protocol of a particular cryptocurrency. This is impossible with crypto trading bots, as they rely on mathematical calculations based on pricing behaviors to spot and execute trades. Thus, it is essential that traders use crypto trading bots with fundamentally sound cryptocurrencies and perfect their trading strategies to generate consistent profits.

How successful are crypto trading bots?

Whether paid or free, crypto trading bots should be selected based on data regarding historical performance, the credibility of the bot’s creator and the reviews of peers who have used it before.

It is a known fact that most of the trading activity on Wall Street is dominated by algorithmic trading, which has been accelerating over the past decade. The same is now reflected in the cryptocurrency markets as institutional investors’ trading activity continues to gain momentum and far exceeds the trading volume contributed by retail investors.

As a result, the usage of trading bots is on the rise. An increasing number of private investors are utilizing one or more AI crypto trading bots to improve their chances of making consistent profits in the cryptocurrency markets.

However, while there are many free and paid crypto trading bots available, it is important to understand how these bots perform the tasks their advocates promise. For a crypto trading bot to deliver positive returns on a net basis, it must execute trades with lightning-fast speeds and have zero or negligible errors in its code.

Risk diversification strategies are used to decide the consistency of profits as even a single un-hedged trade could jeopardize days and weeks’ worth of trading profits. On the trader’s part, it is, therefore, essential to run multiple trading bots and choose only those that have a proven track record of producing substantial returns.

How does a crypto trading bot work?

Developed using programming scripts like Python, Java, C , or C#, crypto trading bots employ APIs to interact with different crypto exchanges and execute trades on them.

Crypto trading bots need to churn data from exchanges, generate trading signals from them, calculate the risk involved and then execute a trade. This applies to buy or sell trades and is repeated for every instance where a crypto trading bot interacts with a crypto exchange.

Using Application Programming Interface (API) keys to access the trader’s account, a crypto trading bot first analyzes the data using machine learning algorithms and identifies potential trades meeting its pre-set criteria.

Subsequently, it allocates capital in proportion to the risk defined by the trader and executes trades by sending buy or sell orders to the crypto exchange using its API. The length of code employed in a crypto trading bot varies depending on the number of trading strategies that it can deploy. At the same time, the programming language used is based on the comfort level of the bot creator.

That said, most advanced crypto trading bots currently in use rely on Python, primarily because it is well-suited to creating software for algorithmic trading and has advanced libraries of which developers can make use.

What is a crypto trading bot?

Using artificial intelligence and programmed codes, crypto trading bots act as automated trading systems that execute trades with minimal errors and require almost no human intervention.

Because cryptocurrency trading occurs seven days a week around the clock, crypto trading bots have emerged as the de-facto tool for professional retail traders and institutional investors to track every move in the cryptocurrency market and profit from it.

A crypto trading bot is a software program that automates trading tasks, such as selecting, buying and selling a cryptocurrency based on specific parameters set by the bot’s programmer or creator.

Employing principles of artificial intelligence (AI) such as safety, objectivity and trust, crypto trading bots can be configured to execute different crypto trading strategies, such as buying into undervalued crypto tokens, adding new cryptocurrencies that have hit the market or even trading in a basket of cryptocurrencies to gain from price fluctuations.

Since crypto trading bots work per pre-defined rules and conditions, they keep investors from falling prey to emotions and offer a more efficient way of trading in volatile cryptocurrency markets.

Whether a crypto trading bot is configured to send trading signals or go the last mile and execute a trade, investors can benefit immensely from the logic-based approach and AI-powered automation on offer.

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